CREDIT OPEN: Primary pickings to remain slim
EU stocks look set for a firmer start on Monday, extending Friday’s rebound which left Stoxx50 and Stoxx600 actually up on the week by a respective 0.73% and 0.55%.
Similarly, S&P500 (+1.11%) and Nasdaq (+1.03%) both rallied Friday, although ended the week in the red by 0.83% & 2.08% thanks to tech jitters which pulled markets sharply lower on Wednesday.
That positivity into the weekend helped propel most, but not all, Asian indices today with mainland China markets underperforming ahead of this week’s meetings by senior Chinese officials.
This week will see earnings continue to provide a big driver of sentiment where a total of 139 Stoxx600 & 171 S&P500 members report while it's also a big week for central bank verdicts where the Fed & BoJ both update markets on Wednesday, followed by BoE Thursday.
Ahead of that, today delivers mostly second-tier data while rates markets get a break from major term auction supply.
Elsewhere, UK Chancellor presents a public finances audit, prior to which reports suggest that Chancellor Reeves will reveal a black hole in the public finances of up to GBP20bn.
For more on latest developments see the European Breakfast Briefing.
Monday’s supply prospects
It is expected to be another slow week for European bond activity as we wrap up July and enter August, traditionally one of the quietest months of the year amid summer holidays. The public euro pipeline is completely empty as of Monday morning, after just four issuers priced deals worth EUR1.375bn last week, making it the lowest single currency volume week of the year by some distance. Away from euros, South West Water wrapped up a roadshow Friday ahead of a GBP 17yr green benchmark expected as early as today’s business. That after peer Severn Trent Water saw strong demand for a GBP250m 14yr sustainable bond last week (details here).
** South West Water GBP 17yr green
On average, the respondents to our weekly US issuance poll are looking for USD27bn to price in the high grade primary market this week, with a range of guesses from a low of USD20bn, to a high of USD35bn. If we were to see issuance just reach the lowest estimate, it would make this July, the second most prolific ex-SSA July on record. See the IG WEEKLY WRAP UP.
What to watch today (and for the week)
** Key Data: UK Jun Mortgage Approvals (09:30), UK Jun M4 Money Supply (09:30), UK Jul CBI Retailing Reported Sales (11:00) and US Jul Dallas Fed Manufacturing Activity (15:30)
** Key Events: UK Chancellor presents public finances audit
** Auctions: No major term auctions scheduled for Monday 29th Jul
** Earnings: 6 Stoxx600 & 9 S&P500 companies report
** Viewpoint - The week ahead:
- July FOMC (Tuesday-Wednesday). No rate cut. No SEP. Powell presser in focus
- BoJ to hike (Wednesday)? Bond buy cuts? Updated projections
- New UK Chancellor presents public finances audit (Monday). BoE to cut (Thursday)? New MPR/presser
- US June JOLTS/July consumer confidence (Tue). Q2 ECI (Wed). July Employment Report (Fri)
- EMU + Big Four Q2 GDP (Tue). German/Spanish (Tue), French/Italian/EMU (Wed) prelim July CPI
- Australia June/Q2 CPI & June/Q2 retail sales (Wednesday). Q2 PPI (Friday)
All times BST
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